Market's view on Kenmare Resources
Published on April 2024
- An institutional shareholder has increased their stake, with the share price considered undervalued and Titanium Dioxide (TiO2) prices firming up.
- There are expectations that production issues flagged for Q1 are already reflected in the share price and conditions should improve.
- Discussions about the timing of stock purchases around ex-dividend dates to maximise returns from dividends, which are substantial.
- Kenmare Resources (KMR) is seen as a robust long-term investment due to its status as a low-cost ilmenite producer with the world’s largest ilmenite mine and a mine life of over 100 years, despite high capital expenditure for relocating West Coast Plant A to Nataka.
- Concerns about KMR’s current valuation being low, potentially indicating vulnerability to takeover attempts.
- Ongoing capital expenditure expected to impact dividend sustainability, with a significant decrease anticipated for the years 2025 and 2026.
- KMR’s significant undervaluation is noted, with a price/earnings (P/E) ratio of less than 3 and a share price that does not fully reflect the company’s capital expenditure.
- There are speculations about potential acquisition interest from major mining companies due to KMR’s attractive asset base and proven operational capability.
- Financial strategies such as director stock purchases and the use of factoring facilities to improve financial flexibility are being implemented.
- Upcoming webinars and investor presentations are being used to improve investor relations and transparency.